BILL NUMBER: SB 914	CHAPTERED  10/10/99

	CHAPTER   795
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 7, 1999
	PASSED THE SENATE   SEPTEMBER 8, 1999
	PASSED THE ASSEMBLY   SEPTEMBER 3, 1999
	AMENDED IN ASSEMBLY   AUGUST 31, 1999
	AMENDED IN ASSEMBLY   AUGUST 26, 1999
	AMENDED IN ASSEMBLY   AUGUST 16, 1999
	AMENDED IN ASSEMBLY   JULY 7, 1999

INTRODUCED BY   Senator Sher

                        FEBRUARY 25, 1999

   An act to amend Sections 7071.5, 7071.10, and 7071.11 of the
Business and Professions Code, and to amend Sections 3089, 3097,
3098, and 3111 of, and to repeal Section 3111.5 of, the Civil Code,
relating to contractors.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 914, Sher.  Contractors:  express trust funds:  liens.
   (1) Existing law provides that a contractor, or a qualifying
individual acting in the capacity of a contractor, shall provide a
bond or deposit, as specified, for the benefit of homeowners and
other persons, including express trust funds, that are damaged by the
licensee, but provides that liability on the bond to an express
trust fund is limited to the difference between the actual loss to
the fund and the amount realized from the proceeds of any other bond
required under a collective bargaining agreement.
   This bill would modify these provisions to apply to both fringe
benefits and other specified forms of compensation, and would provide
that the liability of a bond to an express trust fund is limited to
actual employer payments required to be made on behalf of employees
as part of their overall compensation, without regard to whether the
work was performed on a public or private work.  This bill would make
additional conforming changes.
   (2) Existing law provides that, in an action against a contractor'
s bond or deposit, the claim of any employee for wages and fringe
benefits shall be a preferred claim, but provides that a claim to
recover fringe benefits must be brought within 6 months from the date
the delinquencies were discovered and no later than 2 years from
when the contributions were due.
   This bill would delete the requirement that the claim of any
employee for wages and fringe benefits be a preferred claim, and
would expand the claim period applicable to claims for fringe
benefits to also apply to claims for wages.
   (3) Existing law provides that specified persons, including
laborers, as defined, who contribute labor, skill, or services to a
work of improvement, shall have a mechanic's lien upon the property
so improved.
   This bill would, for purposes of the mechanic's lien law, include
in the definition of "laborer" any person or entity, including an
express trust fund, to whom a portion of the compensation of a
laborer is paid, pursuant to an agreement with the laborer or the
laborer's collective bargaining agent, and would provide that the
fund shall be entitled to assert the same rights and claims as the
laborer, as specified.  This bill would also make related conforming
changes.
   (4) Existing law provides that an express trust fund that is
established pursuant to a collective bargaining agreement to collect
supplemental fringe benefits shall have a lien on particular real
property covered by a wage agreement in the amount of the
supplemental fringe benefit payments it is owed by the payor.
   This bill would apply these provisions to express trust funds
created by both collective bargaining agreements and employment
agreements, and would provide that this lien provision applies to the
total compensation of a laborer, including both fringe benefits and
other specified forms of compensation, and that an express trust fund
shall be entitled to assert the same rights and claims as the
laborer to the extent of the total compensation owing for that work
of improvement.
   (5) Existing law requires express trust funds to provide
subcontractors, upon demand, with a statement of fringe benefit
payments, as specified.
   This bill would repeal that provision.
   This bill would state findings and declarations of the Legislature
as to the bill's purpose.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 7071.5 of the Business and Professions Code is
amended to read:
   7071.5.  The contractor's bond required by this article shall be
executed by an admitted surety in favor of the State of California,
in a form acceptable to the registrar and filed with the registrar by
the licensee or applicant.  The contractor's bond shall be for the
benefit of the following:
   (a) Any homeowner contracting for home improvement upon the
homeowner's personal family residence damaged as a result of a
violation of this chapter by the licensee.
   (b) Any person damaged as a result of a willful and deliberate
violation of this chapter by the licensee, or by the fraud of the
licensee in the execution or performance of a construction contract.

   (c) Any employee of the licensee damaged by the licensee's failure
to pay wages.
   (d) Any person or entity, including an express trust fund
described in Section 3111 of the Civil Code, to whom a portion of the
compensation of an employee of a licensee is paid by agreement with
that employee or the collective bargaining agent of that employee,
damaged as the result of the licensee's failure to pay fringe
benefits for its employees, including, but not limited to, employer
payments described in Section 1773.1 of the Labor Code and
regulations thereunder (without regard to whether the work was
performed on a private or public work).  Damage to an express trust
fund is limited to actual employer payments required to be made on
behalf of employees of the licensee, as part of the overall
compensation of those employees, which the licensee fails to pay.
  SEC. 2.  Section 7071.10 of the Business and Professions Code is
amended to read:
   7071.10.  (a) The qualifying individual's bond required by this
article shall be executed by an admitted surety insurer in favor of
the State of California, in a form acceptable to the registrar and
filed with the registrar by the qualifying individual.  The
qualifying individual's bond shall be for the benefit of the
following persons:
   (1) Any homeowner contracting for home improvement upon the
homeowner's personal family residence damaged as a result of a
violation of this chapter by the licensee.
   (2) Any person damaged as a result of a willful and deliberate
violation of this chapter by the licensee, or by the fraud of the
licensee in the execution or performance of a construction contract.

   (3) Any employee of the licensee damaged by the licensee's failure
to pay wages.
   (4) Any person or entity, including an express trust fund
described in Section 3111 of the Civil Code, to whom a portion of the
compensation of an employee of a licensee is paid by agreement with
that employee or the collective bargaining agent of that employee,
that is damaged as the result of the licensee's failure to pay fringe
benefits for its employees including, but not limited to, employer
payments described in Section 1773.1 of the Labor Code and
regulations adopted thereunder (without regard to whether the work
was performed on a public or private work).  Damage to an express
trust fund is limited to employer payments required to be made on
behalf of employees of the licensee, as part of the overall
compensation of those employees, which the licensee fails to pay.
   (b) The qualifying individual's bond shall not be required in
addition to the contractor's bond when the qualifying individual is
himself or herself the proprietor under subdivision (a) or a general
partner under subdivision (b) of Section 7068.
  SEC. 3.  Section 7071.11 of the Business and Professions Code is
amended to read:
   7071.11.  (a) A copy of the complaint in a civil action commenced
by a person claiming against a bond required by this article shall be
served by registered or certified mail upon the registrar by the
clerk of the court at the time the action is commenced and the
registrar shall maintain a record, available for public inspection,
of all actions so commenced.  The aggregate liability of a surety on
a claim for wages and fringe benefits brought against any bond
required by this article, other than a bond required by Section
7071.8, shall not exceed the sum of four thousand dollars ($4,000).
If any bond which may be required is insufficient to pay all claims
in full, the sum of the bond shall be distributed to all claimants in
proportion to the amount of their respective claims.  Any action,
other than an action to recover wages or fringe benefits, against a
contractor's bond or a bond of a qualifying individual filed by an
active licensee shall be brought within two years after the
expiration of the license period during which the act or omission
occurred, or within two years of the date the license of the active
licensee was inactivated, canceled, or revoked by the board,
whichever first occurs.  Any action, other than an action to recover
wages or fringe benefits, against a disciplinary bond filed by an
active licensee pursuant to Section 7071.8 shall be brought within
two years after the expiration of the license period during which the
act or omission occurred, or within two years of the date the
license of the active licensee was inactivated, canceled, or revoked
by the board, or within two years after the last date for which a
disciplinary bond filed pursuant to Section 7071.8 was required,
whichever date is first.  A claim to recover wages or fringe benefits
shall be brought within six months from the date that the wage or
fringe benefit delinquencies were discovered, but in no event shall a
civil action thereon be brought later than two years from the date
the wage or fringe benefit contributions were due.
   (b) When the surety makes payment on any claim against a bond
required by this article, whether or not payment is made through a
court action or otherwise, the surety shall, within 30 days of the
payment, notify the registrar.  The notice shall contain, on a form
prescribed by the registrar, the name and license number of the
contractor, the surety bond number, the amount of payment, the
statutory basis upon which the claim is made, and the names of the
person or persons to whom payments are made.
   (c) Any judgment or admitted claim against, or good faith payment
from, a bond required by this article shall constitute grounds for
disciplinary action against the licensee, except in those cases of
good faith payment where the licensee has, in writing, timely
instructed the surety not to make payment from the bond on his or her
account, upon the specific grounds that (1) the claim is opposed by
the licensee, and (2) the licensee has, in writing, previously
directed to the surety a specific and reasonable basis for his or her
opposition to payment.  The license may not be reissued or
reinstated while any judgment or admitted claim in excess of the
amount of the bond remains unsatisfied.  Further, the license may not
be reissued or reinstated while any surety remains unreimbursed for
loss and expense sustained on any bond issued for the licensee or for
any entity of which any officer, director, member, partner, or
qualifying person was an officer, director, member, partner, or
qualifying person of the licensee while the licensee was subject to
disciplinary action under this section.  The board shall require the
licensee to file a new bond in an amount as required pursuant to
Section 7071.8.
   (d) Legal fees may not be charged against the bond by the board.
   (e) In any case in which a claim is filed against a deposit given
in lieu of a bond by any employee or by an employee organization on
behalf of an employee, concerning wages or fringe benefits based upon
the employee's employment, claims for the nonpayment thereof shall
be filed with the Labor Commissioner.  The Labor Commissioner shall,
pursuant to the authority vested by Section 96.5 of the Labor Code,
conduct hearings to determine whether or not the wages or fringe
benefits should be paid to the complainant.  Upon a finding by the
commissioner that the wages or fringe benefits should be paid to the
complainant, the commissioner shall notify the registrar of the
findings.  The registrar shall not make payment from the deposit on
the basis of findings by the commissioner for a period of 10 days
following determination of the findings.  If, within the period, the
complainant or the contractor files written notice with the registrar
and the commissioner of an intention to seek judicial review of the
findings pursuant to Section 11523 of the Government Code, the
registrar shall not make payment, if an action is actually filed,
except as determined by the court.  If, thereafter, no action is
filed within 60 days following determination of findings by the
commissioner, the registrar shall make payment from the deposit to
the complainant.
   (f) Any action, other than an action to recover wages or fringe
benefits, against a deposit given in lieu of a contractor's bond or
bond of a qualifying individual filed by an active licensee shall be
brought within two years after the expiration of the license period
during which the act or omission occurred, or within two years after
the date the license was inactivated, canceled, or revoked by the
board, whichever first occurs.  Any action, other than an action to
recover wages or fringe benefits, against a deposit given in lieu of
a disciplinary bond filed by an active licensee pursuant to Section
7071.8 shall be brought within two years after the expiration of the
license period during which the act or omission occurred, or within
two years of the date the license of the active licensee was
inactivated, canceled, or revoked by the board, or within two years
after the last date for which a deposit given in lieu of a
disciplinary bond filed pursuant to Section 7071.8 was required,
whichever date is first.
  SEC. 4.  Section 3089 of the Civil Code is amended to read:
   3089.  (a) "Laborer" means any person who, acting as an employee,
performs labor upon or bestows skill or other necessary services on
any work of improvement.
   (b) "Laborer" also includes any person or entity, including an
express trust fund described in Section 3111, to whom a portion of
the compensation of a laborer as defined in subdivision (a) is paid
by agreement with that laborer or the collective bargaining agent of
that laborer.  To the extent that a person or entity defined in this
subdivision has standing under applicable law to maintain a direct
legal action, in their own name or as an assignee, to collect any
portion of compensation owed for a laborer, that person or entity
shall have standing to enforce any rights under this title to the
same extent as the laborer.  This section is intended to give effect
to the long-standing public policy of this state to protect the
entire compensation of laborers on works of improvement, regardless
of the form in which that compensation is to be paid.
  SEC. 5.  Section 3097 of the Civil Code is amended to read:
   3097.  "Preliminary 20-day notice (private work)" means a written
notice from a claimant that is given prior to the recording of a
mechanic's lien, prior to the filing of a stop notice, and prior to
asserting a claim against a payment bond, and is required to be given
under the following circumstances:
   (a) Except one under direct contract with the owner or one
performing actual labor for wages as described in subdivision (a) of
Section 3089, or a person or entity to whom a portion of a laborer's
compensation is paid as described in subdivision (b) of Section 3089,
every person who furnishes labor, service, equipment, or material
for which a lien or payment bond otherwise can be claimed under this
title, or for which a notice to withhold can otherwise be given under
this title, shall, as a necessary prerequisite to the validity of
any claim of lien, payment bond, and of a notice to withhold, cause
to be given to the owner or reputed owner, to the original
contractor, or reputed contractor, and to the construction lender, if
any, or to the reputed construction lender, if any, a written
preliminary notice as prescribed by this section.
   (b) Except the contractor, or one performing actual labor for
wages as described in subdivision (a) of Section 3089, or a person or
entity to whom a portion of a laborer's compensation is paid as
described in subdivision (b) of Section 3089, all persons who have a
direct contract with the owner and who furnish labor, service,
equipment, or material for which a lien or payment bond otherwise can
be claimed under this title, or for which a notice to withhold can
otherwise be given under this title, shall, as a necessary
prerequisite to the validity of any claim of lien, claim on a payment
bond, and of a notice to withhold, cause to be given to the
construction lender, if any, or to the reputed construction lender,
if any, a written preliminary notice as prescribed by this section.
   (c) The preliminary notice referred to in subdivisions (a) and (b)
shall contain the following information:
   (1) A general description of the labor, service, equipment, or
materials furnished, or to be furnished, and an estimate of the total
price thereof.
   (2) The name and address of the person furnishing that labor,
service, equipment, or materials.
   (3) The name of the person who contracted for purchase of that
labor, service, equipment, or materials.
   (4) A description of the jobsite sufficient for identification.
   (5) The following statement in boldface type:
      NOTICE TO PROPERTY OWNER

   If bills are not paid in full for the labor, services, equipment,
or materials furnished or to be furnished, a mechanic's lien leading
to the loss, through court foreclosure proceedings, of all or part of
your property being so improved may be placed against the property
even though you have paid your contractor in full.  You may wish to
protect yourself against this consequence by (1) requiring your
contractor to furnish a signed release by the person or firm giving
you this notice before making payment to your contractor, (2)
requiring your contractor to furnish a receipt to establish that you
paid the contractor in full and recording no later than 30 days from
receipt of this preliminary notice an affidavit that you paid the
contractor in full, or (3) any other method or device that is
appropriate under the circumstances.

   (6) If the notice is given by a subcontractor who has failed to
pay all compensation due to his or her laborers on the job, the
notice shall also contain the identity and address of any laborer and
any express trust fund to whom employer payments are due.
   If an invoice for materials or certified payroll contains the
information required by this section, a copy of the invoice,
transmitted in the manner prescribed by this section shall be
sufficient notice.
   A certificated architect, registered engineer, or licensed land
surveyor who has furnished services for the design of the work of
improvement and who gives a preliminary notice as provided in this
section not later than 20 days after the work of improvement has
commenced shall be deemed to have complied with subdivisions (a) and
(b) with respect to architectural, engineering, or surveying services
furnished, or to be furnished.
   (d) The preliminary notice referred to in subdivisions (a) and (b)
shall be given not later than 20 days after the claimant has first
furnished labor, service, equipment, or materials to the jobsite.  If
labor, service, equipment, or materials have been furnished to a
jobsite by a claimant who did not give a preliminary notice, that
claimant shall not be precluded from giving a preliminary notice at
any time thereafter.  The claimant shall, however, be entitled to
record a lien, file a stop notice, and assert a claim against a
payment bond only for labor, service, equipment, or material
furnished within 20 days prior to the service of the preliminary
notice, and at any time thereafter.
   (e) Any agreement made or entered into by an owner, whereby the
owner agrees to waive the rights or privileges conferred upon the
owner by this section shall be void and of no effect.
   (f) The notice required under this section may be served as
follows:
   (1) If the person to be notified resides in this state, by
delivering the notice personally, or by leaving it at his or her
address of residence or place of business with some person in charge,
or by first-class registered or certified mail, postage prepaid,
addressed to the person to whom notice is to be given at his or her
residence or place of business address or at the address shown by the
building permit on file with the authority issuing a building permit
for the work, or at an address recorded pursuant to subdivision (j).

   (2) If the person to be notified does not reside in this state, by
any method enumerated in paragraph (1) of this subdivision.  If the
person cannot be served by any of these methods, then notice may be
given by first-class certified or registered mail, addressed to the
construction lender or to the original contractor.
   (3) When service is made by first-class certified or registered
mail, service is complete at the time of the deposit of that
registered or certified mail.
   (g) A person required by this section to give notice to the owner,
to an original contractor, and to a person to whom a notice to
withhold may be given, need give only one notice to the owner, to the
original contractor, and to the person to whom a notice to withhold
may be given with respect to all materials, service, labor, or
equipment he or she furnishes for a work of improvement, that means
the entire structure or scheme of improvements as a whole, unless the
same is furnished under contracts with more than one subcontractor,
in which event, the notice requirements shall be met with respect to
materials, services, labor, or equipment furnished to each
contractor.
   If a notice contains a general description required by subdivision
(a) or (b) of the materials, services, labor, or equipment furnished
to the date of notice, it is not defective because, after that date,
the person giving notice furnishes materials, services, labor, or
equipment not within the scope of this general description.
   (h) If the contract price to be paid to any subcontractor on a
particular work of improvement exceeds four hundred dollars ($400),
the failure of that contractor, licensed under Chapter 9 (commencing
with Section 7000) of Division 3 of the Business and Professions
Code, to give the notice provided for in this section, constitutes
grounds for disciplinary action by the Registrar of Contractors.
   If the notice is required to contain the information set forth in
paragraph (6) of subdivision (c), a failure to give the notice,
including that information, that results in the filing of a lien,
claim on a payment bond, or the delivery of a stop notice by the
express trust fund to which the obligation is owing constitutes
grounds for disciplinary action by the Registrar of Contractors
against the subcontractor if the amount due the trust fund is not
paid.
   (i) Every city, county, city and county, or other governmental
authority issuing building permits shall, in its application form for
a building permit, provide space and a designation for the applicant
to enter the name, branch, designation, if any, and address of the
construction lender and shall keep the information on file open for
public inspection during the regular business hours of the authority.

   If there is no known construction lender, that fact shall be noted
in the designated space.  Any failure to indicate the name and
address of the construction lender on the application, however, shall
not relieve any person from the obligation to give to the
construction lender the notice required by this section.
   (j) A mortgage, deed of trust, or other instrument securing a
loan, any of the proceeds of which may be used for the purpose of
constructing improvements on real property, shall bear the
designation "Construction Trust Deed" prominently on its face and
shall state all of the following:  (1) the name and address of the
lender, and the name and address of the owner of the real property
described in the instrument, and (2) a legal description of the real
property which secures the loan and, if known, the street address of
the property.  The failure to be so designated or to state any of the
information required by this subdivision shall not affect the
validity of the mortgage, deed of trust, or other instrument.
   Failure to provide this information on this instrument when
recorded shall not relieve persons required to give preliminary
notice under this section from that duty.
   The county recorder of the county in which the instrument is
recorded shall indicate in the general index of the official records
of the county that the instrument secures a construction loan.
   (k) Every contractor and subcontractor employing laborers as
described in subdivision (a) of Section 3089 who has failed to pay
those laborers their full compensation when it became due, including
any employer payments described in Section 1773.1 of the Labor Code
and regulations adopted thereunder shall, without regard to whether
the work was performed on a public or private work, cause to be given
to those laborers, their bargaining representatives, if any, and to
the construction lender, if any, or to the reputed construction
lender, if any, not later than the date the compensation became
delinquent, a written notice containing all of the following:
   (1) The name of the owner and the contractor.
   (2) A description of the jobsite sufficient for identification.
   (3) The identity and address of any express trust fund described
in Section 3111 to which employer payments are due.
   (4) The total number of straight time and overtime hours on each
job.
   (5) The amount then past due and owing.
   Failure to give this notice shall constitute grounds for
disciplinary action by the Registrar of Contractors.
   (l) Every written contract entered into between a property owner
and an original contractor shall provide space for the owner to enter
his or her name and address of residence; and place of business if
any.  The original contractor shall make available the name and
address of residence of the owner to any person seeking to serve the
notice specified in subdivision (c).
   (m) Every written contract entered into between a property owner
and an original contractor, except home improvement contracts and
swimming pool contracts subject to Article 10 (commencing with
Section 7150) of Chapter 9 of Division 3 of the Business and
Professions Code, shall provide space for the owner to enter the name
and address of the construction lender or lenders.  The original
contractor shall make available the name and address of the
construction lender or lenders to any person seeking to serve the
notice specified in subdivision (c).  Every contract entered into
between an original contractor and subcontractor, and between
subcontractors, shall provide a space for the name and address of the
owner, original contractor, and any construction lender.
   (n) Where one or more construction loans are obtained after
commencement of construction, the property owner shall provide the
name and address of the construction lender or lenders to each person
who has given the property owner the notice specified in subdivision
(c).
   (o) (1) Each person who has served a preliminary 20-day notice
pursuant to subdivision (f) may file the preliminary 20-day notice
with the county recorder in the county in which any portion of the
property is located.  A preliminary 20-day notice filed pursuant to
this section shall contain all of the following:
   (A) The name and address of the person furnishing the labor,
service, equipment, or materials.
   (B) The name of the person who contracted for purchase of the
labor, service, equipment, or materials.
   (C) The common street address of the jobsite.
   (2) Upon the acceptance for recording of a notice of completion or
notice of cessation the county recorder shall mail to those persons
who have filed a preliminary 20-day notice, notification that a
notice of completion or notice of cessation has been recorded on the
property, and shall affix the date that the notice of completion or
notice of cessation was recorded with the county recorder.
   (3) The failure of the county recorder to mail the notification to
the person who filed a preliminary 20-day notice, or the failure of
those persons to receive the notification or to receive complete
notification, shall not affect the period within which a claim of
lien is required to be recorded.  However, the county recorder shall
make a good faith effort to mail notification to those persons who
have filed the preliminary 20-day notice under this section and to do
so within five days after the recording of a notice of completion or
notice of cessation.
   (4) This new function of the county recorder shall not become
operative until July 1, 1988.  The county recorder may cause to be
destroyed all documents filed pursuant to this section, two years
after the date of filing.
   (5) The preliminary 20-day notice which a person may file pursuant
to this subdivision is for the limited purpose of facilitating the
mailing of notice by the county recorder of recorded notices of
completion and notices of cessation.  The notice which is filed is
not a recordable document and shall not be entered into those
official records of the county which by law impart constructive
notice.  Notwithstanding any other provision of law, the index
maintained by the recorder of filed preliminary 20-day notices shall
be separate and distinct from those indexes maintained by the county
recorder of those official records of the county which by law impart
constructive notice.  The filing of a preliminary 20-day notice with
the county recorder does not give rise to any actual or constructive
notice with respect to any party of the existence or contents of a
filed preliminary 20-day notice nor to any duty of inquiry on the
part of any party as to the existence or contents of that notice.
   (p) The change made to the statement described in subdivision (c)
by Chapter 974 of the Statutes of 1994 shall have no effect upon the
validity of any notice that otherwise meets the requirements of this
section.  The failure to provide, pursuant to Chapter 974 of the
Statutes of 1994, a written preliminary notice to a subcontractor
with whom the claimant has contracted shall not affect the validity
of any preliminary notice provided pursuant to this section.
                                                             (q) A
claimant, as defined in Section 3155, who provides a preliminary
notice to an owner, as defined in Section 3155, shall also provide
the owner with an affidavit form and notice of rights, made available
pursuant to Section 3155.15.
  SEC. 6.  Section 3098 of the Civil Code is amended to read:
   3098.  "Preliminary 20-day notice (public work)" means a written
notice from a claimant that was given prior to the assertion of a
claim against a payment bond, or the filing of a stop notice on
public work, and is required to be given under the following
circumstances:
   (a) In any case in which the law of this state affords a right to
a person furnishing labor or materials for a public work who has not
been paid therefor to assert a claim against a payment bond, or to
file a stop notice with the public agency concerned, and thereby
cause the withholding of payment from the contractor for the public
work, any person that has no direct contractual relationship with the
contractor, other than a person who performed actual labor for wages
or an express trust fund described in Section 3111, may file the
preliminary notice, but no payment shall be withheld from the
contractor pursuant to that notice unless the person has caused
written notice to be given to the contractor, and the public agency
concerned, not later than 20 days after the claimant has first
furnished labor, services, equipment, or materials to the jobsite,
stating with substantial accuracy a general description of labor,
service, equipment, or materials furnished or to be furnished, and
the name of the party to whom the same was furnished.  This notice
shall be served by mailing the same by first-class mail, registered
mail, or certified mail, postage prepaid, in an envelope addressed to
the contractor at any place the contractor maintains an office or
conducts business, or his or her residence, or by personal service.
In case of any public works constructed by the Department of Public
Works or the Department of General Services of the state, such notice
shall be served by mailing in the same manner as above, addressed to
the office of the disbursing officer of the department constructing
the work, or by personal service upon the officer.  When service is
by registered or certified mail, service is complete at the time of
the deposit of the registered or certified mail.
   (b) Where the contract price to be paid to any subcontractor on a
particular work of improvement exceeds four hundred dollars ($400),
the failure of that contractor, licensed under Chapter 9, (commencing
with Section 7000) of Division 3 of the Business and Professions
Code, to give the notice provided for in this section, constitutes
grounds for disciplinary action by the Registrar of Contractors.
   (c) The notice requirements of this section shall not apply to a
laborer described in Section 3089 or to an express trust fund
described in Section 3111.
   (d) If labor, service, equipment, or materials have been furnished
to a jobsite by a claimant who did not give a preliminary notice
pursuant to subdivision (a), that claimant shall not be precluded
from giving a preliminary notice at any time thereafter.  The
claimant shall, however, be entitled to assert a claim against a
payment bond and file a stop notice only for labor, service,
equipment, or material furnished within 20 days prior to the service
of the preliminary notice, and at any time thereafter.
   (e) The failure to provide, pursuant to Chapter 974 of the
Statutes of 1994, a written preliminary notice to a subcontractor
with whom the claimant has contracted shall not affect the validity
of any preliminary notice provided pursuant to this section.
  SEC. 7.  Section 3111 of the Civil Code is amended to read:
   3111.  For the purposes of this chapter, an express trust fund to
which a portion of a laborer's total compensation is to be paid
pursuant to an applicable employment agreement or a collective
bargaining agreement for the provision of benefits, including, but
not limited to, employer payments described in Section 1773.1 of the
Labor Code and regulations thereunder, shall be entitled to assert
the same rights and claims as laborers performing labor upon, or
bestowing skill or other necessary services on, a work of
improvement, to the extent of the compensation agreed to be paid to
that express trust fund for labor on that improvement only.
  SEC. 8.  Section 3111.5 of the Civil Code is repealed.
  SEC. 9.  The Legislature finds and declares that the purpose of
this act is to restore the protection created by the mechanic's lien
law adopted at the first legislative session of this state, refined
and expanded over a century and a half, for the just pay due to
workers on construction jobs, without discrimination as to the manner
in which the pay is allocated, whether union or nonunion, in cash or
a combination of cash and benefits.  The intent of the Legislature
in enacting this act is to clarify that the protections offered in
this title are meant to cover the entire compensation package of
employees, and not to single out or treat differently any particular
form of compensation.
